Over the last week in marketing land there has been intense debate about digital advertising, or more specifically, programmatic.

If your organisation is doing any online advertising – especially if it’s through an agency or third party provider – it’s important you understand what the debate is all about and how your organisation could be affected.

In a nutshell, programmatic is the automation of buying and selling advertising space. It’s not just limited to online but includes TV, streaming, billboards and other ‘out-of-home’ advertising (see this overview by Marketing Week for a more detailed explanation).

Being automated, computers use audience data to decide which ads to buy on which websites to reach a pre-determined type of audience demographic.

The ‘decision’ is made based on the audience a campaign is trying to reach and the behavioural insights of that audience, coupled with the websites or other platforms that have opted to sell advertising space.

What clients are charged to reach a particular audience is determined by supply and demand, with the price offered as a CPM – cost per one thousand advertising impressions. For example, a $10CPM would be $10 for 1000 advertising impressions.

This might sound like a great deal, but there are some important things to consider.

Most display advertising, which is what you see on websites, is automated and it’s often complemented by re-targeting, which allows you to re-target people that have shown interest in your message.

Have you ever left items in an online shopping cart only to find them appearing in ads on every other website you go to, tempting you to complete your purchase? This is re-targeting…

The problem is that programmatic (and re-targeting) only deal with the audience data and not necessarily the context or environment that the advertising is being displayed.

The more general the target audience (for example: female retiree over 60 years), the higher the risk of your ads appearing next to irrelevant or inappropriate content.

While an agency might manage a campaign for you, often they are only the middle man and outsource their programmatic buying via a trading desk alongside many others vying for ad space – referred to as inventory.

This is how some brands have wound up with ads appearing next to videos promoting extremist views as occurred in the UK last week.

Closer to home, we’ve seen Holden, Kia, Foxtel, Bunnings and Caltex pull their campaigns from YouTube this week after discovering their ads were running next to highly offensive videos.

It’s not just video content that can be poorly matched. Google AdWords operates in a similar way, though it incorporates search results too.

A lot of research has been done into the damage caused to a brand when consumers feel harassed by what they consider to be intrusive or irrelevant advertising.

The promise by marketing and advertising agencies of low cost, highly targeted online advertising is a hollow one, and unfortunately unless you know the right question to ask you could end up with a negative ROI.

What sparked the debate about programmatic last week was a presentation at an advertising event by Nick Manning, chief strategy officer of Ebiquity, where he stated that programmatic “isn’t working terribly well” despite huge amounts of money going into it, and that only 20 per cent of spend is reaching the consumer – the rest of it is being chewed up by the chain production and fees to each player involved.

He also told the audience that programmatic is contributing to ad fraud and sourced traffic (robots), pages with too many ads and intrusive advertising.

This, in turn, is increasing adblocking, whereby your ads are actually blocked from a website but may continue to count towards impressions. But by the way, this can’t actually be measured.

Ad fraud, which is when clicks and impressions are generated by robots rather than actual people, is one of the biggest problems of programmatic advertising.

There is simply no way of guaranteeing viewer authenticity, although there are ways to minimise risk of fraud and a lot of money is going into solutions to address it.

None of this is actually new information (besides the only-20%-reaching-consumers part). The issue of transparency or lack there of, has been debated in ad land for a couple of years but it’s probably not something your agency has openly discussed with you.

While many agencies manage media buying in-house, smaller ones are increasingly bringing it in-house to provide a better service because they work directly with the you as the client (and to increase their cut in what is hugely marked up inventory).

No matter what your agency says – whether they outsource media buying to experts or keep it in-house to offer a higher quality service – no one can guarantee that your ads are running alongside appropriate content or that the impressions you paid for were seen by real people if they are using programmatic.

But before you despair at having spent a great deal of your marketing budget on Google AdWords or what seemed like a fantastic package of impressions, there are still many benefits to using programmatic.

Yes, really. It’s just a case of understanding the risks, knowing that this is still a new medium that even the experts are getting their head around, and paying attention to your own activity.

The question really boils down to what you’re trying to get out of the campaign. Is it simply increased brand awareness? Is it traffic to your website? Is it conversions of new clients?

The benefit of programmatic are that it guarantees impressions (views of your ad), it’s cost effective and you do have some control over where your ads do and do not appear.

You can ‘black list’ websites that you don’t want to appear on and target the type of people that you’d like to reach.

Just be aware that it’s not a perfect science and does need to be managed carefully by someone who genuinely cares about your organisation and brand reputation. This usually means dedicating in-house resources.

By using the right data capture platforms you or your agency can track a client conversation back to where they first saw your advertisement.

The potential for this information to inform your future campaigns is amazing, but only when it’s used properly.

As Manning summed up in his presentation last week, “You as advertisers need to know what’s happening to your money. It’s your money, not anyone else’s, but the trouble is that most of your contracts do not permit you a full audit of all of these things. Very few do.”

 

Things to consider

  1. Establish what your primary goals are. Is it impressions, click throughs or actual conversions to securing a client? If you’re part of the management team or board, make sure the figures being presented to you don’t just sound good but can clearly show client conversions. Ask questions.
  2. Changes are possible all the time, so make sure your agency does not just set and forget your campaign. If results aren’t being tracked and used to inform the evolution of your campaign you might be better off using more conservative, traditional media buying strategies.
  3. Automated marketing isn’t right for every brand. It needs to be a conscious decision that aligns with your business goals, strategy and resources. If it’s not being used properly then you’re probably not getting any benefit from it.
  4. Challenge your agency, ask questions, make sure they really do know what they’re doing. There’s a lot criticism from within ad land that many marketers don’t really understand programmatic themselves.
  5. Make sure you have clear deliverables in your agency contract or agreement and ask for transparency around where ads are appearing and the data reports from click throughs. It’s your money so you have every right to this information.

 

For further reading about this issue we recommend these recent articles:

www.mumbrella.asia/2017/03/forget-google-scandal-online-advertising-corrupt-core/

www.marketingweek.com/2017/03/27/state-programmatic-advertising/

www.adnews.com.au/news/programmatic-is-the-biggest-problem-only-20c-in-every-dollar-reach-consumers#t6Jt20e4QMPkD1dz.99

 

*As a side note, many news publishers including Inside Ageing don’t do programmatic advertising because the small amount that Google pays publishers for the ads to appear isn’t worthwhile, especially given publishers then have no control over what ads are placed next to their content. The risk to damaging brands that have been built on quality information is just too great.